Rather, he explained at Rabobank’s Leadership Forum & Innovation Forum late last month, the maturity of the Internet is creating such a substantial shift in how consumers receive information and make purchases that nearly every company and entrepreneur is vulnerable unless they embrace the change.
“We need to take a step back in this room and understand that what we are talking about is not social media or Snapchat. What we are talking about is the maturity of the Internet itself, and what that means to the human race. Everyone in this room – including me – is so disproportionately misunderstanding how substantial this shift is and what will happen over the course of the next decade,” he said.
To begin to understand the full impact and impending change, Vaynerchuk argued, executives must acknowledge that “the Internet is the middleman. Period.”
What that means is every business is vulnerable to being replaced or made unnecessary, he said. And for those who don’t believe the risk, he pointed out the Internet’s negative impact on bookstores first by Amazon, then the taxi industry by shared ride services followed by the hotel industry by house sharing services – all of which were facilitated by the Internet.
“It might be your business next,” Vaynerchuk warned.
With that in mind, he recommended executives and entrepreneurs take several steps to safeguard – and grow – their business in this new paradigm.
Step 1: Guarantee solid branding
The first step to survive and thrive in the Internet era is to secure solid branding.
“There is only one thing that will keep you from being commodity: your brand. That is the only thing that will keep you away from complete commoditization. Can you create an environment where someone makes an emotional decision or a subconscious decision – not a practical one. Because if you are a middle man and people make practical decisions, there is an enormous amount of vulnerability,” Vaynerchuk said.
“It blows my mind how many people here feel comfortable because they have long-term contracts and relationships with some of the biggest companies in the world without realizing that those companies themselves are so disproportionately vulnerable” to the change wielded by the Internet, he added.
Step 2: Embrace social media
The second step to survive the Internet is to embrace the tools it provides and the influence it garners over consumers – such as through social media.
“Eighty billion dollars is spent on television commercials for Fortune 500 CPG brands, yet 94% of them lost market share because not a human being on Earth watches a television commercial,” Vaynerchuk said, deriding traditional marketing methods.
Similarly, he said, full page ads in B2B magazines and buying booths at trade shows is not an efficient way to funnel conversion sales for business.
Neither is programmatic digital buying, Vaynerchuk said, adding that this is “the most garbage, overpriced marketing in the marketplace because no on in this room – just like they don’t consume a commercial – ever goes to a website and carefully consumes a banner ad below the fold and clicks on that banner and gets into a funnel. Yet, billions of dollars are being poured into that environment.”
Rather than continue to use these “outdated” strategies, Vaynerchuk says companies need to go all in on Facebook advertising, which he points out is just as useful for B2B as B2C.
“I am watching fast growing companies that have a million in funding create disproportionate wealth by running Facebook ads against the employees of segmentation,” he said, adding that many people likely don’t know that they can advertise on the social media platform to the employees of an organization with which they want to do business.
A basic but impactful technique is simply running an ad that starts, “Does your head buyer know, does your CIO know, does your CFO know” fill in the blank, he said. “The creative, the video, the presentation, the white paper or paragraph or image of words that starts with copy in the post that says, ‘Does your blank within your organization know…’ will lead to 1.3% to 4% of people forwarding it to that person.”
He added that in the 20 year he has marketed in traditional, direct mail, television and digital, he has never seen top funnel conversions that strong.
Step 3: Do it yourself
The third step to surviving in the new Internet age is take the previous steps yourself and not outsource them, Vaynerchukv said. If you outsource them, he warned, you will not become a savvy practitioner in the space and will not be ready for the next evolutions that will occur between now and 2020 or 2030.
“If you don’t understand how to communicate in the mobile first environment that is today, you will not have a taste or understanding” to succeed in the long term, he said, adding: “Everyone in this room needs to realize that we are about to run an incredible, fascinating business marathon and most of you aren’t even on the treadmill yet, and the treadmill is how you spend your money on marketing and sales.”